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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended March 29, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to _________
Commission file number 0-24746
TESSCO Technologies Incorporated
(Exact name of registrant as specified in its charter)
Delaware 52-0729657
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
34 Loveton Circle, Sparks, Maryland 21152-5100
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 410-472-7000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
The aggregate market value of the Common Stock, $.01 par
value, held by non-affiliates of the registrant based on the closing sales price
of the Common Stock as quoted on the National Association of Securities Dealers,
Inc. National Market System as of May 17, 1996 was $107,295,006.
The number of shares of the registrant's Common Stock, $.01
par value, outstanding as of May 17, 1996 was 4,227,897.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Shareholders
for the fiscal year ended March 29, 1996 are incorporated by reference into
Parts II and IV.
Portions of the registrant's Proxy Statement for the 1996
Annual Meeting of Stockholders are incorporated by reference into Part III.
2
Part I
Item 1 - Business
General
TESSCO Technologies Incorporated ("TESSCO" or the "Company") is a leading
national distributor of products to the wireless communications industry. The
Company currently serves more than 4,500 customers per month in the cellular
telephone, paging and mobile radio-dispatch markets, including a diversified mix
of dealers, cellular and paging carriers and self-maintained users. The Company
offers a wide product selection of more than 14,000 stock keeping units ("SKUs")
which are broadly classified as infrastructure, mobile and portable accessory
and test and maintenance. The Company has developed a proprietary information
technology system, which integrates all aspects of its operations, and which
TESSCO believes provides it with a competitive advantage.
Products
TESSCO's strategy is to identify, select, catalog, promote and sell those
products required by its existing and prospective customers. The Company
principally offers competitively priced, manufacturer brand name products.
Products offered by the Company range from sheet metal screws to sophisticated
spectrum analyzers, with prices ranging from less than $1.00 to over $30,000,
and gross profit margins ranging from less than 5% to over 60%. During fiscal
1996, the Company offered over 14,000 SKUs. The Company's products are broadly
classified as infrastructure, mobile and portable accessory, and test and
maintenance, which accounted for approximately 54%, 33% and 13% of product
revenues during fiscal 1996, respectively.
Infrastructure products are used to build, repair and upgrade wireless
communications base sites, and generally complement radio frequency transmitting
and switching equipment provided directly by original equipment manufacturers
("OEM"). Products include base station antennas, cable and transmission line,
filtering systems, small towers, lightning protection devices, connectors and
miscellaneous hardware.
Mobile and portable accessory products are those products used with mobile
and portable devices, such as cellular telephones, pagers and two-way radios.
Products include replacement batteries, cases, microphones, speakers, mobile
amplifiers, power supplies, headsets, mounts, car antennas and various wireless
data devices.
Test and maintenance products are used to install, tune, maintain and
repair wireless communications equipment. Products include sophisticated
analysis equipment and various voltage and power measuring devices, as well as
an assortment of tools, hardware and supplies required by service technicians.
While TESSCO principally provides manufacturer brand name products, a
variety of products, which are primarily mobile and portable accessory products,
are offered under its private labels "Celldyne," "PowerTel," "Plus" and
"Cascade." The Company acquired two of these private labels at the beginning of
fiscal 1993 as part of an effort to expand its product offerings to include a
greater percentage of private label products, which generally have higher gross
profit margins than the Company's other products. Private label sales have grown
from 1.7% of product revenues in fiscal 1992 to 5.1% in fiscal 1996.
As part of its commitment to customer service, the Company allows customers
to return a product for any reason for credit, within 30 days after the date of
purchase. Total returns and credits have been less than 4% of revenues in each
of the past three fiscal years.
3
As of March 29, 1996 the Company was offering products purchased from
over 230 manufacturers. Although a substantial portion of the Company's
purchases are concentrated with a small number of vendors (approximately
54% of TESSCO's fiscal 1996 revenues were generated by the sale of products
purchased from its top ten vendors, with products purchased from Andrew
Corporation, consisting primarily of cable, generating approximately 29%),
the Company believes that alternative sources of supply are available for
virtually every product type it carries.
Customers
TESSCO's customer base consists of dealers, cellular and paging
carriers and self-maintained users. All of these customers share the
characteristic that they are service organizations designing, installing,
operating or repairing some type of wireless communications system. Dealers,
cellular and paging carriers and self-maintained users accounted for
approximately 38%, 46% and 16% of fiscal 1996 product revenues, respectively.
Dealers sell, install and service cellular telephone, paging and two-way
radio communications equipment primarily for the consumer and small business
markets. TESSCO's customers in this classification include local proprietorships
and retailers, as well as sales and installation centers operated by cellular
and paging carriers.
Cellular and paging carriers are responsible for building and
maintaining the infrastructure system and providing airtime service to
individual subscribers. TESSCO's customers in this classification include Bell
Atlantic Mobile Systems, McCaw Cellular Communications and AT&T.
Self-maintained users have significant internal communications
requirements and, as a result, own and operate their own two-way radio networks
and service their own equipment. TESSCO's customers in this classification
include commercial entities such as major utilities and transportation
companies, federal agencies and state and local governments, including public
safety organizations.
No one customer accounted for as much as 6% of TESSCO's revenues
during fiscal 1996. TESSCO's ten largest customers accounted for approximately
18% of its revenues during fiscal 1996. The Company does not have long-term
contracts with any of its customers, nor does it believe that the loss of
any single customer would have a material adverse effect on its operations.
Method of Operation
TESSCO believes that it has developed a highly integrated,
technologically advanced and efficient method of operation to better serve its
customers and to increase overall corporate productivity and quality. The major
factors that make up the Company's method of operation are discussed below.
4
Information Technology System
Critical to the success of the Company's operations is its
information technology system. TESSCO has made substantial investments in the
development of this system, which integrates cataloging, marketing,
sales, fulfillment, inventory control and purchasing, financial control and
internal communications. The information technology system includes highly
developed customer and product data bases and is integrated with the Company's
centralized distribution center. The information contained in the system is
available on a real time basis to all TESSCO employees and is utilized in every
area of the Company's operations. The Company believes that its information
technology system, which is continually updated and refined, has significant
additional capacity to support increases in revenues without commensurate
increases in expenses.
Customer Relationships
The primary focus of TESSCO's operations is its commitment to make
it easier and more cost effective for customers to acquire products. The
customer relationships team, consisting of 54 representatives as of March 29,
1996, is responsible for initiating and building a long-term relationship with
customers as well as for responding to incoming inquiries and orders. Scheduled
calls are made to each regular purchasing customer for the purpose of
information dissemination, order generation, data base maintenance and
the overall enhancement of the business supply relationship. TESSCO also
continually monitors its customer service levels through report cards
included with each product shipment, customer surveys and regular interaction
with customers. By combining its broad product offerings with a commitment
to superior customer service, TESSCO seeks to reduce a customer's overall
procurement costs by enabling the customer to consolidate the number of
suppliers from which it obtains products while also reducing the customer's
need to maintain higher inventory levels.
The Company's information technology system provides detailed
account information on every customer, including recent inquiries, buying
and credit histories, separate buying locations within a customer and contact
diaries for key personnel, as well as access to technical, product availability
and pricing information. The information technology system increases sales
productivity by enabling any customer relationship representative to provide
any customer with personalized service, and also allows non-technical personnel
to provide a high level of technical product information and order assistance.
TESSCO believes that its commitment to developing a strong
customer relationship both at the time of sale as well as after the sale
enables it to maximize customer satisfaction and retention. The
percentage of customers purchasing products in two consecutive months has
increased from approximately 59% in fiscal 1992 to approximately 63% in
fiscal 1996, and the number of average customers per month has increased
during the same period from 2,646 to 4,591.
Marketing
TESSCO's proprietary customer data base contains detailed information
on over 30,000 existing and potential customers, including the names of
key personnel, past contacts, and inquiry, buying and credit histories.
This extensive customer data base enables the Company to identify and
target potential customers and to market specific products to these targeted
customers. Potential customers are identified through their response to direct
marketing materials, advertisements in trade journals and industry trade shows.
Customer relationship representatives follow-up on these customer inquiries
through distribution of the Company's information materials, tele-sales
and field visits. The information technology system tracks a potential
customer identification from the initial marketing effort, and through the
establishment and development of a purchasing relationship. Once a customer
relationship is established, the Company carefully analyzes purchasing
patterns and identifies opportunities to encourage customers to make more
frequent purchases of a broader array of products. TESSCO believes that it is
able to develop efficient and effective marketing programs to expand its
customer base and increase sales to its existing customers, while at the same
time limiting increases in sales and marketing expenses.
5
The Company utilizes its product data base to develop both broad based
as well as customized product information materials. These materials are
designed to encourage both existing and potential customers to view
TESSCO as an important source of their product requirements by providing
useful and timely product and service information. These customer information
services include Buyer's Guides distributed semiannually to over 16,000
current and prospective buyers, Your Total Source Bulletins, which are
designed to supplement the overall marketing impact of the Buyer's Guides, and
The Wireless Journal, which is designed to introduce the reader to
TESSCO's capabilities and product offerings and contains information on
significant industry trends and product reviews.
TESSCO presently provides complete product and pricing information
on computer diskette, and will offer its complete Buyer's Guide on CD-ROM.
In addition, the Company is planning to introduce a series of electronic
services designed to facilitate and encourage customer orders, such as
computerized order entry and fax on demand product specifications and
price and delivery quotations.
Product Management
The Company focuses on offering both a broad selection of products as
well as alternative selections for each of its products. TESSCO actively
monitors advances in technologies and industry trends, both through
research and continual customer interaction, and continues to add to its
product offerings as new wireless communications products and technologies are
developed.
The Company believes that effective purchasing and inventory control
are key elements ensuring that a broad range of products will be readily
available to fill customer orders. The Company uses its information technology
system to monitor and manage its inventory. Historical sales results, sales
projections and information regarding vendor lead times are all used
to determine appropriate inventory levels. The information technology system
also provides early warning reports regarding inventory levels. As a result of
its emphasis on inventory control and the consolidation of its distribution
functions, the Company has been able to maintain its order completion rate
and support its increasing sales levels without corresponding increases in
inventory levels. The Company improved its inventory turns to 6.5 during
fiscal 1996 from 4.8 during fiscal 1993. Generally, the Company has been
able to return slow-moving inventory to the vendor.
In addition to determining the fundamental product offering, the
Company's product management team provides the technical foundation for both
customers and TESSCO personnel. The product data base is continually updated to
add technical information in response to vendor specification changes and
customer inquiries. The data base contains detailed information on each SKU
offered, including full product descriptions, category classifications,
technical specifications, illustrations, product cost, pricing and shipping
information, alternative and associated products, and purchase and sales
histories. Most of the information is available on a real time basis to
all TESSCO personnel for product development, procurement, technical
support, cataloging and marketing.
6
Order Entry and Fulfillment
Orders are received at the Company's centralized customer
relationship center. While entering orders, customer relationship
representatives have access to technical information, alternative and
complementary product selections, product availability and pricing
information, as well as customer purchasing and credit histories and recent
inquiry summaries. A radio-frequency directed materials handling system,
which is integrated with the information technology system, utilizes bar coded
labels which are applied to every product, allowing distribution center
personnel to utilize radio-frequency scanners to locate products, fill orders
and update inventory. The centralized distribution center also allows the
Company to improve inventory control, minimize multiple product shipments to
complete an order, limit inventory duplication and reduce the overhead
associated with its distribution functions. TESSCO believes that the
distribution center also has the capacity to service a significantly higher
level of sales without the necessity for commensurate increases in expenditures
or inventory levels.
Orders are shipped by a variety of freight lines and carriers.
Destination and handling charges are calculated on the basis of the weight of
the products shipped and not on the distance to the customer. The Company
believes that this pricing structure allows it to attract customers who might
otherwise order from local suppliers.
Employees
As of March 29, 1996, the Company had 178 full-time equivalent
employees. Of the Company's full-time equivalent employees, 98 were engaged in
customer and vendor service, marketing and product management, 58 were engaged
in warehouse and distribution operations, and 22 were engaged in
administration and technology systems services. No employees are covered by
collective bargaining agreements. The Company considers its employee relations
to be excellent.
Competition
The emerging wireless communications distribution industry is
fragmented and is comprised of several national distributors, such as Hutton
Communications and Communications Associates, and numerous regional
distributors. In addition, many manufacturers sell direct. Barriers to
entry for distributors are relatively low, particularly in the mobile and
portable telephone accessory market, and the risk of new competitors entering
the market is high. The Company believes, however, that its information
technology system, large customer base and purchasing relationships with more
than 230 manufacturers provide it with a significant competitive advantage
over new entrants to the market. Certain of the Company's current competitors,
particularly certain manufacturers, have substantially greater capital
resources, sales and distribution capabilities than the Company. In response
to competitive pressures from any of its current or future competitors, the
Company may be required to lower selling prices in order to maintain or
increase market share, and such measures could adversely affect the Company's
operating results.
The Company believes that the principal competitive factors in
supplying products to the wireless communications industry are the quality and
consistency of customer service, particularly timely delivery of complete
orders, breadth and quality of products offered, and procurement costs to
the customer. The Company believes that it competes favorably with
respect to each of these factors. In particular, the Company believes it
differentiates itself from its competitors due to the breadth of its product
offerings, its ability to quickly provide products in response to customer
demand and technological advances, the level of its customer service and the
reliability of its order fulfillment process.
7
Trademarks and Trade Names
The Company maintains a number of registered trademarks and trade names
in connection with its business activities, including "TESSCO," "Your Total
Source" and "The Wireless Journal." The Company's general policy is to
file for trademark and trade name protection for each of its trademarks and
trade names, and to enforce its rights against any infringement.
Item 2 - Properties
The Company's corporate headquarters are located in approximately
16,000 square feet of leased office space located outside of Baltimore, in
Sparks, Maryland. The lease has an initial expiration date of December 31,
2000, and contains options for an additional term of up to three years and an
additional approximately 14,000 square feet of space. The Company also has a
right of first refusal to purchase the building containing its corporate
headquarters.
The Company's centralized distribution center is located in
an approximately 66,000 square foot leased facility located in Hunt
Valley, Maryland, located approximately three miles from the corporate
headquarters. The lease has an initial expiration date of December 31, 1999,
and contains an option for an additional term of up to eight years.
During fiscal 1996, the Company purchased a 156,000 square foot building
located near its existing distribution center in Hunt Valley, Maryland. The
purchase of this building provides the Company with the space it requires,
and will allow for consolidation of its three current facilities into one
location. This consolidation is expected to take place during fiscal 1997.
Item 3 - Legal Proceedings
On April 16, 1996, the Company received a 30-day Notice of Termination
under its Distributor Agreement maintained with Andrew Corporation, one of the
Company's major suppliers of cable. On April 18, 1996, TESSCO filed a lawsuit
with the Maryland Circuit Court in Baltimore County seeking a declaration that
Andrew had violated the Maryland Anti-Trust Act and the Maryland Fair
Distributorship Act in attempting to terminate the Distributorship Agreement.
The Court ruled on June 10, 1996 that these claims should be settled by
arbitration. In order to ensure a continued supply of Andrew product, the
Company requested, ex parte, interlocutory and permanent injunctive relief. The
Company has been granted an ex parte injunction which currently allows a
continued supply of Andrew product. The ex parte injunction was extended by
consent of Andrew and by court order until such time as the arbitration panel
considers whether to extend the injunction further. The date of the hearing for
consideration of the matter has not yet been set.
Sales of Andrew product as a percentage of total sales represented 29% and
23%, respectively, for fiscal 1996 and the fourth quarter of 1996. The Company
continues to offer competitive alternative product offerings and sources for
Andrew product items. Should the injunctive relief not be extended, or
alternative product acceptability be low or product availability become
unreliable, the impact on Company revenues and earnings could be material.
8
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 4A - Executive Officers of the Company
Executive officers are elected annually by the Board of Directors and serve
at the discretion of the Board of Directors. Information regarding the executive
officers of the Company who are not directors is as follows:
Name Age Position
Gerald T. Garland 45 Vice President
Rocco A. Baldasare 39 Vice President
Steven E. Lehukey 38 Vice President
Pierce B. Dunn 45 Vice President
Gerald T. Garland has served as Treasurer and Chief Financial Officer of
the Company since September 1993. From 1983 to August 1993, he held
various positions in commercial lending and corporate finance with Maryland
National Bank, including Senior Vice President of the Commercial Finance
Division. Mr. Garland was a financial manager and plant controller for
Black & Decker Corporation from 1976 to 1983.
Rocco A. Baldasare has held a variety of positions with the Company since
March 1990 and currently serves as Team Leader for Market Development, with
responsibility for developing marketing programs. From 1986 to March 1990, he
was the Director of Market Development with The Personal Marketing Company, a
publisher of personalized marketing products for business executives.
Steven E. Lehukey has served as a Team Leader for Customer Transactions
since February 1994, with responsibility for enhancement of customer service and
management of accounts receivable and credit. From 1986 to February 1994, he
held various positions in commercial lending with Maryland National Bank,
including serving as a Vice President in the Commercial Finance Division.
Pierce B. Dunn has served as a Team Leader for European Operations
since July 1995. From 1991 to 1994, Mr. Dunn served as Chairman of CONNOR
Environment Services, a company that provides environmental and engineering
services throughout the United States. From 1980 to 1991, he served as President
of The Kirk Stieff Company, a manufacturer of prestige gift products. Mr. Dunn
also served as an attorney at Venable, Baejter & Howard from 1977 to 1980.
Part II
Item 5 - Market for Registrant's Common Equity and Related Stockholder Matters
The Market for the Company's Common Stock and Related Stockholder
Matters, appearing on page 24 of the Company's 1996 Annual Report, is
incorporated herein by reference.
Item 6 - Selected Financial Data
The financial information for the five years ended March 29, 1996,
appearing on page 12 of the Company's 1996 Annual Report, is incorporated herein
by reference.
9
Item 7 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
Management's Discussion and Analysis of Financial Condition and
Results of Operations, appearing on pages 13 and 14 of the Company's 1996
Annual Report, is incorporated herein by reference.
Item 8 - Financial Statements and Supplementary Data
The Financial Statements, related notes and supplementary data set
forth on pages 12 through 22 of the Company's 1996 Annual Report, is
incorporated herein by reference.
Item 9 - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
Part III
Item 10 - Directors and Officers of the Registrant
For information with respect to executive officers of the Company who
are not directors, see "Item 4A - Executive Officers of the Company."
Information with respect to directors, contained under the caption "Proposal 1 -
Election of Directors" in the Company's Proxy Statement prepared in
connection with the Company's 1996 Annual Meeting of Shareholders, is
incorporated by reference herein.
Item 11 - Executive Compensation
Information with respect to this item, contained under the
caption "Executive Compensation and Other Information" in the Company's Proxy
Statement prepared in connection with the Company's 1996 Annual Meeting of
Shareholders, is incorporated herein by reference.
Item 12 - Security Ownership of Certain Beneficial Owners and Management
Information with respect to this item, contained under the
caption "Security Ownership of Management and Principal Shareholders" in the
Company's Proxy Statement prepared in connection with the Company's 1996 Annual
Meeting of Shareholders, is incorporated herein by reference.
Item 13 - Certain Relationships and Related Transactions
Information with respect to this item, contained under the caption
"Certain Transactions" in the Company's Proxy Statement prepared in connection
with the Company's Annual Meeting of Shareholders, is incorporated herein by
reference.
10
Part IV
Item 14 - Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following documents are filed as part of this report:
1. The following report and financial statements included in the 1996
Annual Report to Stockholders are incorporated herein by reference
under Item 8 of this Report:
Pages in
Annual Report
Report of Independent Public Accountants 23
Balance Sheets 16
Statements of Operations 17
Statements of Changes in Stockholders' Equity 18
Notes to Financial Statements 20 - 22
2. The following financial statement schedules are included herewith:
Schedule Description
Schedule II Valuation and Qualifying Accounts
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable.
3. Exhibits
2.1.1 Cartwright Communications Acquisition Agreement (incorporated by
reference to the Current Report on from Form 8-K dated June 3, 1996).
3.1.1. Amended and Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1.1. to the Company's
Registration Statement on Form S-1 (No. 33-81834)).
3.1.2 Certificate of Retirement of the Registrant (incorporated by reference
to Exhibit 3.1.2 to the Company's Registration Statement on Form S-1
(No. 33-81834)).
3.1.3 First Certificate of Amendment to Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1.3. to the
Company's Registration Statement on Form S-1 (No. 33-81834)).
3.2.1. Amended and Restated By-laws of the Registrant (incorporated by
reference to Exhibit 3.2.1. to the Company's Registration
Statement on Form S-1 (No. 33-81834)).
3.2.2. First Amendment to Amended and Restated By-laws of the Registrant
(incorporated by reference to Exhibit 3.2.2. to the Company's
Registration Statement on Form S-1 (No. 33-81834)).
10.1 Employment Agreement dated March 31, 1994 with Robert B. Barnhill, Jr.
(incorporated by reference to Exhibit 10.1 to the Company's
Registration Statement on Form S-1 (No. 33-81834)).
11
10.2 Stockholders' Agreement dated September 29, 1993 by and among the
Company, Robert B. Barnhill, Jr., Privest I N.V., Privest II N.V.,
Grotech Partners II, L.P., Grotech Partners III, L.P., Grotech III
Companion Fund, L.P., Grotech III Pennsylvania Fund, L.P. and
Centennial Business Development Fund, Ltd. (incorporated by reference
to Exhibit 10.2 to the Company's Registration Statement on Form S-1
(No. 33-81834)).
10.3 Stock Option by and between the Registrant and Robert B. Barnhill, Jr.
dated September 28, 1994 (incorporated by reference to Exhibit 10.3 to
the Company's 1995 Annual Report on Form 10-K).
10.4 1993 Non-Statutory Stock Option Agreement with the Trustees of the
TESSCO Technologies Incorporated Retirement Savings Plan
(incorporated by reference to Exhibit 10.20 to the Company's
Registration Statement on Form S-1 (No. 33-81834)).
10.5 Employee Incentive Stock Option Plan, as amended (incorporated by
reference to Exhibit 10.21 to the Company's Registration Statement on
Form S-1 (No. 33-81834)).
10.6 1994 Stock and Incentive Plan, as amended (incorporated by reference
to Exhibit 10.22 to the Company's Registration Statement on Form S-1
(No. 33-81834)).
10.7 Financing Agreement dated March 31, 1995 by and between the Company
and NationsBank, N.A. (incorporated by reference to Exhibit 10.7 to
the Company's 1995 Annual Report on Form 10-K).
10.8 Lease Agreement dated April 13, 1992 by and between the Registrant
and Loveton Center Limited Partnership, as amended (incorporated by
reference to Exhibit 10.24 to the Company's Registration
Statement on Form S-1 (No. 33-81834)).
10.9 Lease Agreement dated September 16, 1991 by and between the Registrant
and Valley Associates, as amended (incorporated by reference to
Exhibit 10.25 to the Company's Registration Statement on Form S-1 (No.
33-81834)).
10.10 Distribution Agreement dated October 1, 1993 by and between the
Registrant and Andrew Corporation (incorporated by reference to
Exhibit 10.27 to the Company's Registration Statement on Form S-1 (No.
33-81834)).
10.11 Stock Compensation Plan for Chief Executive Officer dated January 15,
1996.
11.1 Statement re: Computation of Per Share Earnings.
13.1 1996 Annual Report to Shareholders.
21.1 Subsidiaries of the Registrant (incorporated by reference to Exhibit
21.1 to the Company's Registration Statement on Form S-1 (No.
33-81834)).
23.1. Consent of Arthur Andersen LLP.
(b) The registrant did not file a report on Form 8-K for the quarter ended
March 29, 1996.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
TESSCO TECHNOLOGIES INCORPORATED
By: /s/ Robert B. Barnhill, Jr., President
Robert B. Barnhill, Jr., President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons in the capacities and
on the dates indicated.
Signature Title Date
/s/ Robert B. Barnhill, Jr. Chairman of the Board, President and Chief June 27, 1996
Robert B. Barnhill, Jr. Executive Officer
(principal executive officer)
/s/ Gerald T. Garland Treasurer and Chief Financial Officer June 27, 1996
Gerald T. Garland (principal financial and accounting officer)
/s/ Jerome C. Eppler Director June 19, 1996
Jerome C. Eppler
/s/ Martin L. Grass Director June 27, 1996
Martin L. Grass
/s/ Benn R. Konsynski Director June 27, 1996
Benn R. Konsynski
/s/ Dennis J. Shaughnessy Director June 27, 1996
Dennis J. Shaughnessy
/s/ Morton F. Zifferer, Jr. Director June 27, 1996
Morton F. Zifferer, Jr.
13
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
To the Board of Directors and Shareholders of
TESSCO Technologies Incorporated
We have audited in accordance with generally accepted auditing
standards, the financial statements included in TESSCO Technologies
Incorporated's annual report to shareholders incorporated by reference in this
Form 10-K and have issued our report thereon dated April 18, 1996. Our audit was
made for the purpose of forming an opinion on the basic financial statements
taken as a whole. The schedule listed in the foregoing index is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Baltimore, Maryland
April 18, 1996
Schedule II
TESSCO Technologies Incorporated
Valuation and Qualifying Accounts
For the Years Ended March 29, 1996, March 31, 1995, and April 1, 1994
1996 1995 1994
Allowance for doubtful accounts and sales returns:
Balance, beginning of year $474,000 $366,400 $396,300
Provisions 166,200 186,300 204,900
Writeoffs (208,500) ( 78,700) (234,800)
Balance, end of year $474,000 $474,000 $366,400
EXHIBIT INDEX
2.1.1 Cartwright Communications Acquisition Agreement (incorporated by
reference to the Current Report on Form 8-K dated June 3, 1996).
3.1.1. Amended and Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1.1. to the Company's
Registration Statement on Form S-1 (No. 33-81834)).
3.1.2 Certificate of Retirement of the Registrant (incorporated by reference
to Exhibit 3.1.2 to the Company's Registration Statement on Form S-1
(No. 33-81834)).
3.1.3 First Certificate of Amendment to Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1.3. to the
Company's Registration Statement on Form S-1 (No. 33-81834)).
3.2.1. Amended and Restated By-laws of the Registrant (incorporated by
reference to Exhibit 3.2.1. to the Company's Registration
Statement on Form S-1 (No. 33-81834)).
3.2.2. First Amendment to Amended and Restated By-laws of the Registrant
(incorporated by reference to Exhibit 3.2.2. to the Company's
Registration Statement on Form S-1 (No. 33-81834)).
10.1 Employment Agreement dated March 31, 1994 with Robert B. Barnhill, Jr.
(incorporated by reference to Exhibit 10.1 to the Company's
Registration Statement on Form S-1 (No. 33-81834)).
10.2 Stockholders' Agreement dated September 29, 1993 by and among the
Registrant, Robert B. Barnhill, Jr., Privest I N.V., Privest II N.V.,
Grotech Partners II, L.P., Grotech Partners III, L.P., Grotech III
Companion Fund, L.P., Grotech III Pennsylvania Fund, L.P. and
Centennial Business Development Fund, Ltd. (incorporated by
reference to Exhibit 10.2 to the Company's Registration Statement
on Form S-1 (No. 33-81834)).
10.3 Stock Option by and between the Company and Robert B. Barnhill, Jr.
effective September 28, 1994 (incorporated by reference to Exhibit 10.3
to the Company's 1995 Annual Report on Form 10-K)
10.4 1993 Non-Statutory Stock Option Agreement with the Trustees of the
TESSCO Technologies Incorporated Retirement Savings Plan
(incorporated by reference to Exhibit 10.20 to the Company's
Registration Statement on Form S-1 (No. 33-81834)).
10.5 Employee Incentive Stock Option Plan, as amended (incorporated by
reference to Exhibit 10.21 to the Company's Registration Statement on
Form S-1 (No. 33-81834)).
10.6 1994 Stock and Incentive Plan, as amended (incorporated by reference to
Exhibit 10.22 to the Company's Registration Statement on Form S-1 (No.
33-81834)).
10.7 Financing Agreement dated March 31, 1995 by and between the Company and
NationsBank, N.A. (incorporated by reference to Exhibit 10.7 to the
Company's 1995 Annual Report on Form 10-K).
10.8 Lease Agreement dated April 13, 1992 by and between the Registrant and
Loveton Center Limited Partnership, as amended (incorporated by
reference to Exhibit 10.24 to the Company's Registration
Statement on Form S-1 (No. 33-81834)).
10.9 Lease Agreement dated September 16, 1991 by and between the Registrant
and Valley Associates, as amended (incorporated by reference to Exhibit
10.25 to the Company's Registration Statement on Form S-1 (No.
33-81834)).
10.10 Distribution Agreement dated October 1, 1993 by and between the
Registrant and Andrew Corporation (incorporated by reference to Exhibit
10.27 to the Company's Registration Statement on Form S-1 (No.
33-81834)).
10.11 Stock Compensation Plan for Chief Executive Officer dated January 15,
1996.
11.1 Statement re: Computation of Per Share Earnings.
13.1 1996 Annual Report to Shareholders.
21.1 Subsidiaries of the Registrant (incorporated by reference to Exhibit
21.1 to the Company's Registration Statement on Form S-1 (No.
33-81834)).
23.1. Consent of Arthur Andersen LLP.